ACC515 – You wish to go on an overseas family holiday
Question 1 (a) You wish to go on an overseas family holiday in 15 months’ time which will cost $20,000. If your financial institution is offering you 6% pa (compounded monthly), how much do you need to deposit in your account each month in order to save the required amount before you go on holidays? (b) You have been offered the opportunity to purchase a mining business investment which is priced at $16,000,000. The investment involves some start-up costs in the first years and some mine re-mediation costs after the project is completed in 10 years. The expected cash flows for the project are below and you have an expected rate of return of 15% pa. End of year Cash flow…
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